NAB: 73M TV Sets Need DTV Boxes

About 73 million TV sets would likely need $300 converter boxes to continue working if the federal government ordered the shutdown of analog broadcasting today, the National Association of Broadcasters claimed in a filing Wednesday.

Based on the NAB’s figures, the cost to ensure that every analog-TV set not connected to a pay TV service would continue working would run about $22 billion.

But the trade group indicated that the price tag would shrink if the transition deadline were extended because it would give consumers more time to purchase digital-TV sets and converters, the price tags of which are expected to decline with mass-market saturation.

The Federal Communications Commission is considering a plan to terminate analog broadcasting Dec. 31, 2008, but regulators and lawmakers are concerned about the consumer impact. The FCC is seeking information on the cost dimensions of implementing a hard date.

In FCC comments, the NAB said 20.5 million TV households were broadcast-only, meaning that they don’t subscribe to cable or satellite. Those households own 45 million analog sets. Another 28 million analog sets are owned by pay TV customers who have not connected them to the multichannel service.

The United States has 280 million analog-TV sets in 108 million households. About 19% of TV households are broadcast-only, the NAB said.

The trade group proposed a subsidy program funded by auction revenue of analog spectrum as a means of ensuring that millions of analog-TV sets will not become obsolete overnight.

“A key to ending the transition, to not disenfranchising large numbers of consumers and to mitigating the disruption for consumers with analog sets will be making digital-to-analog converters widely available at a reasonable price. Some government subsidization likely may be necessary here,” the NAB said.

The $22 billion price tag is probably too high. Broadcast-only homes could migrate to cable or satellite, and cable subscribers could wire their off-air-only sets. Motorola Inc. has said that it can build a box for $67.

The scope of the subsidy is also a factor. A program that guaranteed just one $67 box for each of the 20.5 million broadcast-only homes would cost $1.4 billion, a figure far below auction-revenue projections of analog-broadcast spectrum.

The government could lower the cost even more by limiting subsidy eligibility to low-income households.